Marketing, advertising & media intelligence

Loved by some, loathed by the taxi industry, Uber, the ride sharing app phenomenon, is a lesson in displacement and the future of transport.

Not without a fight however. In every market Uber has attempted to enter so far, there’s been an angry mob on either side of the argument—irate taxi drivers on one side, fearful that their business is in jeopardy (it is), and on the other, eager Uber enthusiasts, including both riders and drivers who see the platform as their golden ticket to a cheap, low-effort and lucrative transport solutions.

And backlash or not, Uber is spreading like wildfire. Since its genesis in 2009, the driver/rider connection app has expanded to 58 countries and 300 cities worldwide, launching here in May of last year.

That rapid growth may be remarkable, but maybe not surprising. As Uber’s PR team puts it, the company is “bringing innovation to [an industry] that hasn’t been innovated on in decades”.

Still, Uber is operating in a grey area of the law—the New Zealand police recently charged 16 of the country’s thousand-strong Uber drivers with infringement notices, before dropping those same charges due to insufficient evidence—so it’s currently petitioning the government to loosen laws that would allow the company to include a much wider range of drivers in their roster with a minimum of red tape.

So what does the rise and rise of Uber mean for New Zealand transport? Is Uber really the darling of a new transport economy, annihilating inefficiencies and harnessing technology for the betterment of all? Or are we too eagerly swallowing “sugar-coated poison” (as NZ Taxi Federation executive director Roger Heale put it), putting our lives and dollars in the hands of a group of unregulated cowboys?

Uber’s NZ general manager, Oscar Peppitt, says that, first and foremost, New Zealand’s current regulation is out of date, inefficient and it’s the consumer that’s paying the price.

“Seven years ago there was no such things a smartphone and the current regulation we have reflects that,” he says.

“A [potential Uber driver] who wants to earn some casual income needs to pass a series of licensing checks that can take up to 12 weeks and cost over $2000. If you have a mother of two who wants to provide her family with an alternative income stream, that’s just not going to happen. We’re just calling for efficient regulation that focuses on safety and protection and lets companies work in that space.”

“We’re a cheaper service simply because we increase driver utilisation rates,” says Peppitt. “When a taxi driver is only doing four or five rides a day, of course they’re going to charge riders more. But if you can keep a driver very busy, he doesn’t need to charge a high price. Uber can do that, and that’s a win/win.”

Peppitt says the company plans to revolutionise the way we think about transport, cutting costs, cutting the number of the cars on the road, and better managing the cars remaining. And he’s got a new product to help.

“Look at it this way,” he says. “Every city is suffering from some form of congestion. There are a billion cars on the road and there doesn’t need to be.”

“Our new ride-sharing product, UberPool, uses the technology to provide a driver with multiple pick-ups and drop-offs in a single trip. If you can forgive the cliché, it’s a game-changing product. The cost could easily be comparative with fixed-route options such as buses and trains.”

With a thousand Uber drivers currently on the road in New Zealand, that spells a lot of data waiting to be exploited, something that hasn’t escaped Peppitt.

“We collect all the data that’s required to get you in touch with a driver, information around background checks and information that reflects the quality of the experience—driver and rider feedback. Sometimes that feedback’s poor—like the driver not taking the most efficient route. That’s useful information to collect though, because then we’re in a position to think about how we use GPS, and use that information to make the service as good and as efficient as it can be. Similarly, we can see that a lot of rides terminate at public transport hubs for example, so there’s room to improve efficiencies there and evidence that Uber fits well over established transport options like trains and buses. We’re only a five-year-old company and for four fifths of our life we’ve been fighting against some pretty heavy incumbents, so we’re only still learning what we can do with this information.”

Peppitt says that he has a vision of future transport that is flexible, efficient and far cheaper than any model so far, radically reducing the amount of cars on the road and perhaps eliminating the need for individual car ownership entirely.

“For me, it will come down to two qualities: perfectly efficient and perfectly sustainable transport. Currently we’re burning a lot to get where we need to go, using a lot of resources and were not using them efficiently.

“I fool around with the numbers and ask: how far can you get in the city with Uber as opposed to driving and parking for the day? This is interesting to me, because when the price drops far enough, people start to think about the actual value of their car.”

And that, for Peppitt, is the crux of the matter.

“Because we are moving from a world where you absolutely need a car, to a future where that simply is not the case. We don’t know what that will look like specifically, because it depends on that particular city. Our model breaks for every city we enter.”

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Couldn't agree more. It's everyone's problem now but brought on mostly by selfish farming practices. Rather than trying to get everyone behind it, they should be reporting on what they are doing to clear it up and provide regular updates.

1. Pollute waterways 2. Deflect blame to the general public This is definitely a 'you' problem, DairyNZ. The rest of us already do want clear waterways... that's kind of the point. Manifesto advertising doesn't work when your brand is trying ...

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